NZ Post reports $35.6 mln loss on quakes, write downs, sluggish economy
By Jason Krupp
Aug. 26 (BusinessDesk) - New Zealand Post Group posted a full-year net loss of $35.6 million as its balance sheet bore the brunt of a $29.1 million hit related to the Christchurch earthquakes, the exit from Australian assets, increased bad debt provisioning, and the sluggish economy.
The earnings loss for the 12 months ended June 30 compares to a profit of $1.3 million in the previous year, according to a statement from the state-owned postal services operator. The earnings loss before interest and tax was $25 million in the period, down from an EBIT surplus of 47.4 million previously. Revenue was $1.27 billion, up from $1.2 billion.
In May the company flagged that it would substantially miss its net profit target of $60.8 million for the year, but gave no guidance on the exact range.
Earnings were impacted by an increase in Kiwibank bad debt provisioning of $67 million in response to the impacts of depressed economic conditions and the Christchurch earthquakes, the $35 million write down to its Parcel Direct Group unit in Australia, and restructuring costs of $12.3 million.
Stripping out items, underlying profit was $41.7 million after tax, down from $73.6 million a year ago.
"While the result is very disappointing, the group is confident of a return to a positive net profit after tax in the coming year," said chief executive Brian Roche. "The group has taken necessary and prudent actions which have seen us create a solid foundation to reinvigorate the business."
The company said the majority of the significant items affecting the business were of a non-cash nature, and were not expected to have a material effect on the group’s ability to meet its dividend or debt obligations.
"There is a need for significant change in the way we operate parts of our business if we are to be sustainable," Roche said. "We have made substantial progress in implementing some of those changes and will continue the process in the coming year."
The Standard and Poor’s credit rating is AA- on stable outlook. The company will pay the government a final dividend of $2.075 million, down 67.7% from a year earlier.